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November 14, 2018

Duluth Trading Co. South Portland site was just waiting to be developed

Courtesy / Duluth Trading Co.
Courtesy / Duluth Trading Co.
The first Duluth Trading Co. store in Maine opened at 55 Maine Mall Road two weeks ago, and is the 13th of 15 the company opened this year, bringing its nationwide total to 45.

The 1.5 acre lot on Maine Mall road next to the Maine Turnpike was prime for development — Andrew Ingalls, of Malone Commercial Brokers, knew it.

Potential buyers, on the other hand, shied away and the listing languished.

Then, about two years ago, Duluth Trading Co.'s development partner Oppidan called. Two weeks ago, Maine's first Duluth Trading store opened on the spot in a 12,950-square-foot new building.

"I had it listed for a long time, we showed it to a lot of people," Ingalls told Mainebiz. "There were some bites, but nothing."

The lot, part of South Portland property owned by the Starr family, had its challenges. The original parcel was split by the Turnpike and the larger west side portion was sold long ago.

The east side portion, next to the Portland Jetport, and bordered by Darling Road, Maine Mall Road and the Turnpike, had one buildable acre, with half an acre of wetlands that were part of the Longwood Creek watershed.

There were also issues related to road pavement, dealing with the Federal Aviation Administration because of the proximity to the airport, sewer connections, a portion of the parking being in Portland, and more.

But it had easy access off Western Avenue and two Turnpike exits, as well as great potential visibility.

"There were some near misses [with potential developers]," Ingalls said "They couldn't see the Turnpike for the trees. But the thing is, those trees could be cut down."

The developers for Wisconsin-based Duluth Trading., which opened 15 stores across the country this year, "understood what could be done there," Ingalls said.

Duluth Trading, which sells apparel and accessories geared, opened its 45th store, and first north of Massachusetts, at the site two weeks ago.

The company, doing business as KTJ 307 LLC, bought the 1.5 acres for $740,000, closing on April 20. Ingalls represented the seller, and Atlantic Retail Properties represented the buyer.

Bricks and mortar paying dividends

Photo / Peter Van Allen
Photo / Peter Van Allen
The Duluth Trading Co. store at 55 Maine Mall Road has drawn a steady stream of customers since it opened.

Kenneth Lewis, district manager for Duluth Trading's East Coast operations, said Tuesday he's asked frequently about the fact the company, which started as a catalog-sales retailer, is opening stores while other stores close.

"We've established a customer base all over the U.S.," Lewis said. The base is familiar with the company's inventory and a store is a natural offshoot.

The bricks-and-mortar focus has paid off, according to CEO Stephanie Pugliese, who earlier this year said the company continues to see higher sales growth in markets with an established store. "Which supports our long-term strategy to significantly expand our total market opportunity through continued strength in online capabilities and the full expression of the brand in a brick-and-mortar setting," she added.

Lewis said Tuesday said that the company, which specializes in work apparel, also has many male customers, who tend to shop differently than women do. They want to see the item, to touch it, feel the quality of it.

He said longtime customers are enthusiastic when they first come to a store after shopping online. "It's like Christmas," Lewis said.

He also said the company isn't daunted by opening a store in the land of L.L.Bean.

He said the two stores offer different products.

He said the company's focus is on workwear, and while fashionable, it's also functional. That also separates it from from other outdoors-focused brands like Cabela's and Orvis, which also have nearby stores.

"We really don't have any competitors," he said. "L.L.Bean is a great brand, but our customers will shop at both stores."

The company's catalog customer base in Maine is strong, and the company, with its bricks-and-mortar expansion, thought Maine would be a good fit.

"Maine people are hard-working people," he said. "They're working at the docks, in construction, they work hard and they love what they do." He said that, too, makes Maine a good fit for the brand.

Duluth Trading Co. (NASDAQ: DLTH) added 15 stores last year and plans another 15 next year, with a goal to open 100 stores across the United States. By the end of the year, the retailer, which started in Duluth, Minn., and is now headquartered in Mount Horeb, Wisc., will have stores from South Portland to Portland, Ore.

Hitting the jackpot

Image / Google Maps
Image / Google Maps
The new Duluth Trading Co. store is in prime location, right off the Maine Turnpike.

When the company decided to open a store in Maine, it focused on South Portland, and it was a just a matter of finding the right location in the city, Lewis said.

Ingalls said the fact it's next to the Turnpike had always been key to the Maine Mall Road lot's desirability — there are few commercial spots available along the Turnpike in the Portland area.

The area near the airport and north of the mall is developing, including a Home2Suites hotel that opened across the street from the Duluth Trading Post earlier this year.

Ingalls knew the 55 Maine Mall Road lot was a hidden gem, and when the developer's representatives first called, he persisted in making the connection happen.

A lot of research goes into where Duluth builds a store, and Duluth's Lewis said the company "hit the jackpot," with the parcel.

"It's a great location," Lewis said. "You can see [the store] right from the highway, you can see it when you're landing or taking off in your plane."

Ingalls said that the developers were also skilled with dealing with all the challenges that came with the lot. "It was like going to real estate school, watching it unfold," Ingalls said.

The sale took nine months to close, but when it did, they were ready to start building the next day.

Ingalls went to the Nov. 8 grand opening, and the store was packed. "Everyone wants to check it out," he said.

"They did a fantastic job, it was amazing," he said. "These people took a chance on a location and its really working out."

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